Tackling High Prices: What UK Financial Regulators Have in Store for 2025
As we move further into 2025, the UK financial regulatory landscape is preparing for notable changes, particularly in the areas of consumer protection and the ongoing management of high prices. At Cutts and Co Accountancy, we believe in keeping our clients and readers well informed about these developments, especially as they carry the potential to significantly impact the financial services sector.
The Consumer Duty: A Primary Focus
The Financial Conduct Authority (FCA) has made it clear that its main priority for 2025 will remain the Consumer Duty. This initiative is aimed at promoting better outcomes for consumers, with particular focus on fair value and the treatment of vulnerable customers.
In the first quarter of 2025, the FCA is expected to publish a review of how firms treat their vulnerable customers. This emphasises the regulator’s continued commitment to safeguarding those who are most at risk. Alongside this, the FCA will be conducting thematic investigations across a range of sectors, products and services, closely monitoring pricing and value. The objective is clear: to ensure that all consumers receive fair treatment and adequate value for their money.
Regulatory Reforms and Consolidation
The UK government has announced its intention to consolidate the Payment Systems Regulator (PSR), integrating most of its responsibilities within the FCA. This move is expected to help streamline regulatory processes and improve efficiency across the financial services sector.
In addition, the government’s Action Plan for regulators, released in March 2025, sets out a number of significant pledges by both the FCA and the Prudential Regulation Authority (PRA). These commitments are designed to support economic growth, stimulate investment, and drive innovation, all while maintaining financial stability and prioritising consumer protection.
For instance, the FCA plans to assign more dedicated supervisors to early-stage and high-growth firms. The regulator will also extend pre-application support to businesses involved in wholesale payments and crypto services. Furthermore, efforts to simplify mortgage and financial advice rules are under way, aimed at facilitating increased home ownership in the UK.
Addressing High Prices and Consumer Resilience
In 2025, the FCA will unveil its updated five-year strategy, with an important focus on strengthening consumer resilience. A key aspect of this strategy is reforming the redress system to make it more predictable and effective. This follows a joint Call for Input by the FCA and the Financial Ombudsman Service (FOS), with findings expected during the first half of the year.
Meanwhile, the issue of high prices remains high on the agenda. The FCA will scale up its supervisory and enforcement efforts under the Consumer Duty to address this concern. The regulator’s emphasis will be on ensuring that pricing and value are fair across all sectors, keeping firms accountable for delivering appropriate value to their customers.
Regulatory Support for Growth and Innovation
While consumer protection continues to be a top priority, the FCA also aims to encourage innovation and support business growth in the financial services sector. One example of this is the planned review of contactless payment limits, including the possibility of scrapping the current £100 limit per transaction. Such a change could offer consumers greater flexibility and convenience in everyday purchases.
Moreover, the FCA is fast-tracking a review of capital requirements for specialised trading firms. Alongside this, steps are being taken to reduce the regulatory reporting burden on firms. These adjustments are expected to foster a more business-friendly environment, enabling financial services to grow and innovate more rapidly.
Conclusion
Looking ahead through 2025, UK financial regulators are taking meaningful action to address the twin challenges of high consumer prices and the need for greater protection. At the same time, there is a clear commitment to supporting growth, innovation and economic resilience within the financial services sector.
At Cutts and Co Accountancy, we are dedicated to keeping our clients informed on these important regulatory changes. By understanding and adapting to this evolving landscape, businesses can position themselves for long-term success. Whether it involves ensuring fair consumer outcomes or embracing a more efficient regulatory system, the steps being taken by the FCA and other authorities are likely to bring wide-reaching changes to the financial industry in the year ahead.
